Council sees glimpse of tough budget decisions that await

One of the major issues of Wednesday's City Council meeting was a budget report presented by Interim City Manager Dennis Speer and a request to make adjustments that were mistakenly left out of the first budget approved in June.

One of the major issues of Wednesday's City Council meeting was a budget report presented by Interim City Manager Dennis Speer and a request to make adjustments that were mistakenly left out of the first budget approved in June.

Speer presented a Powerpoint slide show revealing the impacts the city faced for FY 2012-13 and 2013-14.

The impact revealed $348,000 increase in expenditures needed for the current year due to unaccounted for expenses as well as a sharp decrease in $931,000 revenue.

Speer asked for the approval of resolution to apply a windfall $620,000 garnered from a settlement with Kern County and make necessary budget reductions.

The expenditures, highlighted in another agenda item presented by Speer, highlighted those expenses.

According to the staff report prepared by city staff, the city since its first budget adjustment in July "there were expenditures and/or contracts/obligations that the City continued to have and is paying for that were not included in the budget."

The requested adjustments include accounting for salaries, contract fees and other ongoing expenses that had not been adjusted for in the last adjustment.

They include $40,000 to cover the rest of the city's match for salaries of two COPS grant-funded police officers, $20,000 to close a contract with city consultant Kosmont Companies, $80,000 to cover the salaries of Park and Recreations officials, $85,000 to budget for the city's lobbyist and grant writer, $67,000 for the contract with HF&H, the city's solid waste litigation consultant, $35,000 for the annual maintenance cost of the city's Senior Center Building, $3,000 for the annual DART contract to pick up trash on Balsam Street and $18,000 to cover the cost of a returning Parks and Recreation employee.

The budget amendment totals to $348,000, an amount that the city can siphon from the $620,000 it received as a settlement from Kern County.

However, the budget adjustment has come under scrutiny and heavy criticism from some, including outgoing Vice Mayor Jerry Taylor.

Taylor took the city to task in a Dec. 3 email to Speer regarding its fiscal state and the budget report.

Taylor charged the city had not been living within its means for years.

During his presentation Speer pointed out the city faced a likely revenue decline of $931,000, and recommended applying what remained of the settlement after the recommended adjustments were made, or $272,000, leaving $658,000 shortfall to still be plugged.

To combat that, Speer said the city could either make $658,000 in cuts while using the $575,000 the city received from the Benz Sanitation settlement as a general fund reserve, or cut $83,000 and use the Benz settlement to plug remaining shortfall.

Page 2 of 3 - If the second option were approved, the city could face $1.2 million in cuts for the FY 2013-14 budget. The first option would only require $621,000 budget cut with the reserve fund still intact for FY 13-14.

The presentation drew a slew of comments from the public and the council members themselves.

All five council members agreed that Speer's first option was the lesser of two evils.

"We have to have some kind of reserve," Councilmember Lori Acton said. "I think we should apply combination of cuts and little of the settlement money. A balanced approach is best."

Newly selected Mayor Pro Tem Jason Patin agreed and argued the city needed to get its financial house in order.

"I don't want to sit here year after year year telling department heads we need to fire people," Patin said.

Holloway agreed a decision on the the two approaches needed to be made.

"I hate to make these decisions at this time of year," he said. "Because the only thing left to cut is people."

Holloway pointed out that a plan needed to be submitted, even if he wouldn't necessarily vote for it.

Taylor pointed out during public comment via teleconference that the Benz settlement was technically a Waste Water loan and should be returned to the Waste Water fund, not be borrowed against.

"The money came from the waste water fund is not really a reserve,” Taylor said.

During public comment, George "Andy" Anderson argued that hard decisions needed to be made.

Anderson said that everything needed to be reevaluated and that cuts need to be made in every service, as well as to extraneous services the city put money into.

"Whatever we need to do, we need to do it now," he said.

The council approved a decision for Speer to formulate a budget plan based on the first option to bring back to the council for its Dec. 19 meeting.

During the discussion of the amended budget items, Ridgecrest resident Mike Neel asked after some of the amended expenditures.

Neel took to task some of the salaries paid to the city's administration staff, pointing out some people on the naval base did not make as much as city administrators.

Neel also pointed out that any waste water funds the city borrowed should be returned to the fund.

Assistant Finance Director Tess Sloan was called to testify about it, and she said that the budget amendment would correct previous adjustments.

Mayor Clark said the matter before the council was one it had to wade through despite fallout in miscommunication from the departure of a city manager and finance director.

It is what is, and we're strapped with this," Clark said. "We're dealing with this as best as possible."

Page 3 of 3 - George Anderson, returning to the podium, asked the council where the money would come from.

It was explained the matter would come back before the council with recommended cuts. The council would approve the resolution asking for the amendment, but would be refined at the Dec. 19 council meeting. The council approved the resolution unanimously.

The city council adjourned the meeting to continue today at 4 p.m. at City Hall to discuss a public hearing item regarding amendments to the city's five-year Community Development Block Grant.